Long Term Care Benefits Available

"Planning Opportunities to Qualify Abound – Move Assets and Qualify"
 

According to reports by the VA published in 2005, one-third (33%) of all people in the United States over the age of 65 have the potential to receive a VA Pension benefit.  However, only 4.7% of this large population of potential beneficiaries was actually receiving a benefit in 2005.
 

Which one to Apply for – Pension or Compensation

Of the two benefits available as outlined below, in many cases VA Compensation provides much richer benefits when compared to VA Pension benefits.

Compensation and Pension benefits claims are submitted on the same form. (The Veteran should use VA Form 21-526.  The Surviving Spouse of a veteran should use VA Form 21-534).   If an applicant is awarded both benefits, the claimant can only receive one of them.  Generally, for veterans or a surviving spouse of a veteran with the out-of-pocket costs for caregivers, nurses, geriatric care managers, homecare, assisted living facility care, the Pension benefit may result in a higher, greater benefit when compared to VA Compensation benefit (depending on the level of disability rating).  A veteran entitled to both should analyze which will provide the greatest amount of benefits.

Compensation and Pension Benefits - Defined

            VA Compensation - In order to qualify for Compensation benefits, the veteran must have received a disability rating by the VA to qualify.  Disability ratings range from 0% to over 100%.  There is no income or asset test for Compensation benefits.  Compensation benefits are not taxable.  Compensation is designed to award the veteran a certain amount of monthly income to compensate for loss of earnings potential after discharge due to an injury or illness incurred or exasperated while serving on active duty.  In order to receive Compensation, a veteran has to have evidence of a service-connected disability.  
 

            VA Pension - A great resource to help pay for in-home care or an assisted living facility. The purpose of this benefit is to provide funds to help offset or pay for out of pocket costs of care to a disabled veteran under 65, and veterans who are over 65 who served at least 90 days, one day of which was served during wartime period (See Table 1), whose discharge status was other than “dishonorable”. A surviving spouse of a veteran also may qualify for these Pension benefits.
 

            Most people are not aware that the VA automatically classifies veterans 65 and older as well as surviving spouses as “disabled “ for purposes of qualifying for VA Pension benefits.  To qualify the applicant must also have a low income and a level of countable assets that is not enough to meet their current cash flow needs to sustain themselves (living expenes) for their remaining life expectancy.  On the streets the rumor is the asset level caps are somewhere between $50,000 to $80,000.  That is only a rumor.  Bottom  line is, the VA does not count a home the Veteran is living in or his automobile. If a Veteran has assets under $50,000 there is an overriding presumption by the VA caseworkers that the Veterans assets are insufficient to sustain the Veteran over his life expectancy. But even then the caseworker is charged with looking at each Veterans specific circumstances and applying the tests of available funds to sustain the Veteran.  If assets exceed $80,000 automatically the caseworker requires supervisor approval before approving a Veteran for Pension benefits.

 

If you have assets over these amount, DON'T STOP READING. Help is available   

 

Few know that there are great planning tools to re-position assets and shift income to become qualified for VA Pension benefits.

 

In terms of the VA asset and income tests, the VA does not count a veteran, or surviving spouse of a veteran’s, house or automobiles when looking at asset levels.  The VA does not penalize the applicant for transfers like Medicaid nursing home laws do.  Another misunderstood concept is how income is counted and treated.  The Maximum Allowable Pension Rate (MAPR) plus Aid & Attendance benefit for a married veteran is $1,950.00 in 2010 (See Tables 2 and 3).  In calculating income for VA Pension benefit purposes, out-of-pocket medical expenses reduce gross income dollar for dollar, less a small VA deductible (which is equal to 5% of the maximum allowed pension rate for the Veteran’s pension category).  Out-of-Pocket medical costs is broadly defined by the VA and can even include family members caregiver services if properly documented. 
 

As mentioned above, interestingly, the $50,000 to $80,000 asset level has to do with VA internal filing requirements and is not an actual hard and fast rule.  Any case where VA countable assets exceed $80,000 requires the VA caseworker to obtain supervisor review and approval

 

The asset test ultimately becomes a subjective decision made by the veterans service representative (VSR) and is based upon the overall current cash flow financial needs required by the veteran or surviving spouse of the veteran to maintain his/her current living arrangements and out-of-pocket costs of care 
 

As an example of how to apply the rules for asset and income tests,

A married veteran over age 65, with an honorable discharged, served over 1 day during World War II is assigned by the VA a maximum annual pension rate (MAPR) in 2010 of $1,291.00 a month (See Tables 2 and 3).

 

The married couples gross income is only Social Security retirement benefits totaling $1,100.00

 

Their combined assets (Not counting their car, house, or personal furnishings, which are all exempt for VA asset purposes) totals $45,000.00

 

The married veteran needs significant help getting going in the morning and needs help with medications and bathing and dressing. His wife cannot help him with this. He has  has a care giver comes to his house at a cost of $800.00 per month that he pays her cash and gets a receipt.

 

Since the veteran is over the age of 65, he automatically qualifies for Pension plus Aid & Attendance benefits. Veterans over 65 are automatically considered disabled to the point of qualifying for the additional monies for Aid & Attendance.

 

The calculation from a VA countable income standpoint would be $1,100 – $735.00 ($800.00 – $65.00 [VA Medical Expense deductible = 5% of the maximum pension rate for a married veteran which is $1,291.00 in 2010]),  equals $365.00 which is considered VA countable income (IVAP). 

 

The next step is to calculate the amount of total Veterans Pension and Aid & Attendance benefits the veteran is eligible to receive. 

 

Take the maximum annual pension rate category applicable to the veteran that includes Aid & Attendance benefits for a married veteran. That equals  $1,950.00 (See Table 2), less $365.00 (IVAP from above) now equals a total VA Pension plus Aid & Attendance benefit available of $1,450.85.

 

Now the married couple has an additional $1,450.85 available to live on and pay for care.

Understanding the intricate inner-workings of the VA laws and how to position one’s financial affairs properly for eligibility for VA Pension benefits is not an easy undertaking. 

 

There are many “traps” and one must know how to utilize the laws.  Perhaps this is why Pension benefits are one of the Veterans Benefits Administration’s (VBA) “best kept secrets”.  Not that the VBA is trying to keep a secret, it just takes technical knowledge of the laws and inner-workings of the department to understand how to determine if one is eligibility for Pension benefits and what amounts he/she may be eligible for.
 

VA laws are written in a manner giving the applicant for benefits the “benefit of the doubt”.  Veteran Service Reps (VSR’s) are typically very helpful and want to see the veteran and a surviving spouse receive benefits.. But do not expect the VSR's to know the intricacies of how to move assets and income sources to “get qualified” for VA benefits.  Their job is to assist in completing the applications, not assist in “planning”. They are not trained to do that.
 

Aid & Attendance and Homebound Additional Special Monthly Pension Benefits

In addition to regular Pension benefits, if a veteran, or surviving spouse of a veteran requires assistance due to a physical or mental infirmity, the VA pays an additional benefit on top of regular Pension.  These additional benefits are classified as 1) “Aid and Attendance” and 2) “Housebound”. 

 

To qualify for the additional Aid & Attendance or Housebound benefits the veteran, or surviving spouse of a veteran, must be in need of regular and on-going assistants with activities of daily living from a caregiver, or be housebound to where he/she can only leave home with assistance or on occasions where it is necessary. 

 

No specific rating is required to qualify for regular Pension benefits, however to receive Aid & Attendance or Housebound additional benefits, the VA requires a veterans service representative (VSR) assign a “rating” to the applicant’s disabilities. An applicant who is a patient in a nursing home, blind or nearly blind, or has severe visual problems, is automatically provided a “rating” and is automatically qualified for Aid & Attendance benefits.  The VSR is employed by the VA and is trained to analyze medical reports and interview caregivers and providers in order to determine whether the veteran or his surviving spouse needs the level of care associated with Aid & Attendance or Housebound requirements.
 

In order to receive one of these ratings the applicant must check the “Yes” box on VA Form 21-526 (claim for a living veteran) or VA Form 21-534 (Applying for death pension for a surviving spouse) that states “Are you claiming a special monthly pension because you need the regular assistance of another person, are blind, nearly blind, or having severe visual problems, or are housebound?”  Failure to check this box may result in a lengthy delay or no rating being provided and in some cases denial of the claim.
 

For Aid & Attendance which are really additional benefits above and in addition to Pension Benefits, - the activities of daily living which the veteran or surviving spouse of a veteran is unable to perform are taken into consideration in connection with the overall medical and physical condition of the person applying for benefits.  The criteria is defined as the applicant being so “helpless as to need "regular” (scheduled and ongoing) aid and attendance from someone else.
 

For Housebound additional Pension benefits, the VA means “permanently housebound by reason of disability or disabilities.”  This requirement is met when the veteran, or surviving spouse of a veteran, is confined to his or her dwelling and the immediate premises or, if in a hospital or assisted living facility, ward or clinical area, and it is anticipated the disability or disabilities and current confinement will continue throughout the veteran or his surviving spouse’s lifetime.  A person who cannot leave his immediate premises unless under the supervision of another person or require another person to drive the veteran or his widow, after analysis of the veteran or the veteran’s widow’s circumstances, may very well meet the criteria to be considered eligible for housebound extra pension benefits. 
 

According to federal VA law (38 CFR Part Three), the following criteria are used to determine the need for aid and attendance:

• Inability of claimant to dress or undress himself (herself), or to keep himself (herself) ordinarily clean and presentable;

• Frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back, etc.);

• Inability of claimant to feed himself (herself) through loss of coordination of upper extremities or through extreme weakness;

• Inability to attend to the wants of nature;

• Or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.
   

Medical evidence for a rating for “Aid & Attendance” or “Housebound” benefits for living arrangements, other than a nursing home, should be submitted with the application to avoid a delay in the VA process time.  Proof of the medical expenses should be included. Photocopies of invoices, or statements on the provider’s letterhead are acceptable.  Copies of canceled checks are not.  Evidence of payment should include the following: amount paid, date payment was made, (purpose of the payment), nature of the product or services provided the name of the person who provided the product or service, name and address of the provider to whom payment was made.
 

It is also suggested the veteran or the surviving spouse of a veteran who is applying for these additional benefits, obtain a “Statement of Attending Physician” report completed by his/her attending physician prior to submission of the claim to the VA.  The report should be attached to the application submitted to the VA and state that the Veteran is in need of the aid and attendance of another individual in order to maintain the applicant’s safety, health, and welfare and without such assistance would be endangered.  For those in a nursing home the VA has Form 21-0779- Request for Nursing Home Information in Connection with Claim for Aid & Attendance.  The applicant should talk to the social worker at the nursing home and ask them if they have this form on file and if not obtain one and complete it for you.  This should be attached to the VA application being submitted for the pension benefits.
 

In conclusion, the application should be completely filled out. All boxes and blank lines or section that do not apply or is zero, write that in those boxes (N/A or Not applicable in the appropriate sections is acceptable).  The VA may return an application if all boxes are not “filled in” with something.
 

Submitting a Pension Claim Form – The Process

Applications for first-time pension claims are mailed to the regional office of the State in which the applicant resides (In Florida – St. Petersburg, Florida).  Upon receiving an original application, the VA worker will date stamp the document and send a verification letter back to the person who submitted the application.  This date becomes the “effective date” of the claim if benefits are awarded.  Retroactive payments are made back to the first of the month following the month of the effective date stamp.
 

The VA has developed a process whereby one department has responsibility for acquiring information, documentation and follow-up to ensure the application is “complete”.  Note that it is imperative that the DR-214 (discharge papers) are attached to the application.  Failing to attach or include discharge papers could result in a minimum of a two-month delay.  Once that department has determined that the application has all of the documentation and information necessary for a ratings decision or to move on to the next step, it is then sent to the ratings team for a decision or the post determination team for further processing.  Once the rating team has completed its review (If required for the claim), the claim is then handed off to the post-determination team that will then send the final notifications of award/denial to the applicant, and make arrangements for payment of the benefits to start (if award granted). 
 

Note that as a result of this assembly line system, many times documents cross in the mail or get misplaced in the process.  Therefore, it is suggested the applicant keep detailed records and copies of everything that is sent to the VA in the event that they should ask you for duplicates of information already sent to them.
 

Persistence and patience are required when submitting the application to the VA. Remember they want to help, but the system takes time as does any governmental process.

TABLE 1

WARTIME - DEFINED

TABLE 2

Following are the rates paid by the VA for Pension and Combined Pension plus Housebound and

Aid & Attendance Benefit

PAID TO A VETERAN

Table 3

Following are the rates paid by the VA for Pension and as well as combined Pension plus Housebound or Aid & Attendance additional benefit

PAID TO A QUALIFIED SURVIVING WIDOW OF A VETERAN